Condo complex set for MGM site

By Liz Benston (contact)

Thursday, Dec. 5, 2002 | 11:12 a.m.

MGM MIRAGE expects to build a luxury condominium complex on the northeast end of the company's MGM Grand casino resort property in Las Vegas with partner and condominium developer Turnberry Associates.

The move bolsters Las Vegas' image as an upscale vacation home destination and marks the second major Las Vegas project by Florida-based Turnberry, whose luxury Turnberry Place condo complex on Paradise Road has drawn scores of wealthy singles and couples to the city.

It also marks Turnberry's second-ever "condo hotel" -- a fairly new real estate concept that features condos built on hotel property. The concept is aimed at creating upscale residences that can take advantage of full-service hotel amenities nearby.

The companies said today they will build up to six 40-story towers on the property starting in the second quarter of 2004 at the site of MGM Grand's idled family theme park on Koval Lane near Harmon Road -- an area east of the Las Vegas Strip and north of Tropicana Road.

News of the project first surfaced in October, though it wasn't confirmed until today.

Sales for the towers are expected to start next summer.

MGM MIRAGE will receive a portion of the sales proceeds for the condos, a Wall Street analyst said today. MGM MIRAGE and Turnberry officials declined to reveal details of the contract.

Under consideration is an arrangement whereby condo owners could rent their out units as vacation homes, Turnberry said.

Suites -- which will feature one- and two-bedroom units -- will be priced from $350,000 to $1 million and penthouses will run from $1.4 million to $2.6 million. Each tower will consist of 578, fully-furnished units with such features as crown molding, raised panel wood doors, granite countertops, marble bathrooms, televisions, fax machines, high-speed Internet access and appliances.

The towers will have a lounge and swimming pool but will be near many more amenities at the MGM Grand, MGM MIRAGE said. The resort hotel has a 171,000 square-foot casino, five outdoor pools, a spa and fitness center, concierge and housekeeping services.

Merrill Lynch casino analyst David Anders said today that the limited amenities at the proposed complex will encourage owners to gamble, dine and take advantage of other attractions at the MGM Grand.

"We believe the development represents an effective way for MGM MIRAGE to maximize the value of its existing assets given the limited capital investment on the part of (the company)," Anders wrote in a research note to investors.

MGM MIRAGE initially expects to contribute three acres of a total 18 acres that made up the theme park to build the towers. If all six towers are built, the company would still have about four acres between the MGM Grand and its nearby conference center to pursue further expansion projects, Anders said.

"The land represents one of the premier locations for a condominium project in all of Las Vegas, offering convenient airport and monorail access and linkage to MGM Grand," MGM Grand President and Chief Executive Officer John Redmond said in a statement. "It will create an exciting opportunity for guests to own a piece of the Las Vegas experience."

Added Turnberry Principal Jeffrey Soffer: "We plan to draw on our expertise in the Las Vegas and condo-hotel markets to build one of the most desirable places to live and vacation in the world."

Turnberry has completed two of an anticipated four condo towers at Turnberry Place on Paradise Road near Sahara Avenue and the Las Vegas Hilton. A third tower, roughly 60 percent sold out, is under construction with the fourth expected to be complete by early 2006.

Turnberry announced plans to build a London-theme casino resort on the Las Vegas Strip next to Turnberry Place but later put those plans on hold due to lack of financing. Those plans remain on hold, Turnberry said today. The company hasn't yet decided how to develop the vacant land, the site of the former El Rancho casino.

"As we continue to grow and we come out of our rustic heritage and get more sophisticated, new ideas come here," Las Vegas hotel broker David Atwell said. "It just adds another dimension."

The MGM Grand project won't be far from Polo Towers, a timeshare high-rise near MGM Grand and south of Harmon Avenue, he said.

Turnberry's second "condo-hotel" is under construction at Miami Beach in Florida. The condo complex, which will be located next to the famed Fontainebleau hotel, broke ground a few months ago and is more than 60 percent sold.